In Fight Over Dallas' Racist Housing Policies, HUD Threw the Whistleblowers Under the Bus

If the editorial in The Dallas Morning News this morning has any credibility, and I am sure it does, HUD has agreed to throw the whistleblowers under the bus in the Lockey/MacKenzie racial segregation complaint against the city of Dallas.

It's not a surprising outcome, because paying off the two developers who first accused Dallas five years ago of having a secret racist housing policy has always been the city's sticking point.

Last month I told you Dallas was basically saying uncle on accusations that they systematically kept low-income housing out of downtown. But even back then they were saying they didn't want any money to go to the guys who ratted them out.

It sounds as if Mayor Mike Rawlings has succeeded in selling HUD on a deal, which he is outing first, of course, on the editorial page of the city's official newspaper. I suspect part of it will be that Dallas will not have to sign on the dotted line saying it did anything bad. But look at the deal.

What you will see in the settlement itself is a total reversal of decades of housing policy. For years, any housing that might be occupied by poor non-whites was jammed into the already segregated southern half of the city. That will have to stop, and that's a good thing. As assistant city manager Theresa O'Donnell told me last month, the settlement will provide Dallas "a tremendous opportunity" to carry out steps toward reform that "I don't know we would have taken had this not occurred."

Cutting the whistleblowers out of the deal, however, is a depressing outcome at several levels. This is the first major action taken by HUD under its just-sworn-in new secretary, Julian Castro, and it pretty much smears egg on the faces of HUD's fair housing division, charged with enforcing the anti-segregation portion of HUD's institutional mandate.

What this deal says is that HUD will enforce fair housing if somebody forces them to, but they'll make sure whoever does it gets tossed in the ditch before it's over. In this agreement, HUD basically agrees to play the dual parts of back-stabber and fool.

If you don't believe me, look at the language in the News' editorial, blaming the entire situation on federal bureaucrats gone daft: "The thing that might be clearest when all is said and done," the paper says, "is just how frustrating, even incomprehensible, it can be to do business with a federal bureaucracy."

Yup, that's who made us practice racial segregation. Those federal bureaucrats.

The paper calls Lockey and MacKenzie "two inexperienced developers," and they say "the city's economic development team, the Downtown Connection TIF board and anyone else at City Hall with a modicum of business sense turned the deal down flat."

No, no, 'fraid not. They all did business with them. HUD vetted Lockey's group and cleared them for a $52 million loan. Lockey, the principal, was sailing smooth and clear with City Hall until he told them he was going to obey federal law and provide the legally required ratio of affordable units. That's when City Hall yanked the rug, a fact HUD confirmed in its own four-year investigation.

The News chides Lockey for putting his deal in bankruptcy, but the city put the deal in bankruptcy by pulling promised funding after they found out there were going to be black and brown people living there. All of that has been confirmed in the HUD investigation as well.

For months HUD was adamant that the city had to make Lockey whole as part of this settlement. The only thing that changed, frankly, was the swearing in of Julian Castro.

What lasting effect here and elsewhere does this outcome have? Huge. It costs millions of dollars to mount the kind of complaint and litigation Lockey and his lawyers have brought. What this settlement tells the next whistleblower is, "Bring us this kind of evidence -- evidence that forces us to act -- and we will pay you back by slitting your throat on the courthouse steps."

That is not an aggressive posture on racial segregation, but it's great news for racists all over the country. Hey, even if HUD catches you, all they're going to do is give you more money.

None of this is over. Lockey and his attorneys have a new fair housing lawsuit loaded and ready for bear, and when that gets going all of the central characters in the HUD complaint will find themselves going back over their stories, only this time with their hands on the Bible in a federal courthouse.

Lockey tells me his false claims suit, kicked out of court twice now but without prejudice, will be back in court soon, amended to answer the judge's objections. But you know: that's his business.

Here's mine. The reason Dallas continues to struggle with racism is that it has always succeeded in not facing it, in not looking itself in the mirror and doing the hard spiritual work people had to do a half century ago in the movement cities. Dallas thinks that makes it cute. I think it's a plague.

Now it's all right back to the same old arrogant language spewing from the daily newspaper, spewing from City Hall as if none of this had ever happened. Thanks a lot, Julian Castro.

Since 1998 Jim Schutze has been a columnist for the Dallas Observer, writing about local politics and culture. Schutze has been a recipient of the Association of Alternative Newsweeklies’ national award for best commentary twice and Lincoln University’s national Unity Award for writing on civil rights and racial issues three times. In 2003 he received the National Association of Black Journalists’ award for commentary. In 2011 Schutze was admitted to the Texas Institute of Letters.